The current checkerboard nature of U.S. cannabis legalization is creating opportunities for growers and distributors.

The California market alone is expected to hit $5 billion in sales by 2019. And as growers, distributors, and retailers rush to serve this huge market, their inability to access capital and lines of credit from traditional financial institutions has created a lucrative niche market.

With cannabis still prohibited at the federal level, banks have been unable to lend money to cannabis-oriented businesses in states where it is legal. The situation has created a unique opportunity for companies that can provide creative financing options for cannabis companies eager to tap the growing U.S. recreational cannabis market.

There are certain industry challenges regarding financing in the United States of America. CROP finances real estate, land development and equipment, in a user-friendly and efficient manner that allows licensed tenants to scale operations parallel to rapid industry growth.

Michael Yorke, CEO, Crop Infrastructure Corp.

Turnkey Infrastructure Options for Licensed Cannabis Growers

One Canadian company offering a solution to the problem is Crop Infrastructure Corp. (CSE: CROP) (OTC: CRXPF). CROP was built to provide licensed cannabis growers with help on land expansion and big-ticket capital expenses like greenhouses, foundations, roads, hydroponics, and lighting systems.

The company assists with land acquisition and development for licensed growers in exchange for leasing and management fees. CROP CEO Michael Yorke comments, “There are certain industry challenges regarding financing in the United States of America. CROP finances real estate, land development and equipment, in a user-friendly and efficient manner that allows licensed tenants to scale operations parallel to rapid industry growth.”

CROP has been an early mover in Washington, Nevada, and California markets as they have built out their recreational and medicinal cannabis support business. By constructing growing facilities and then leasing them to licensed growers, the company has created a way for U.S.-based producers to access the infrastructure they need to build out their operations.

120 acres of land under pivot at CROPâs Nevada property, high CBD hemp.SUPPLIED

The company’s specialty modern greenhouse canopies are designed to be state-of-the art and highly automated. CROP helps smooth the way for potential tenant growers by supplying capital, infrastructure, and industry experience to tenants providing they have a license.

Eyeing Expansion of U.S. Legalization

CROP is busy building its networks where legalization is already progressing. One of the company’s main focuses is the U.S. market. Yorke elaborates, “We’re Canadian, but we are looking globally, as global markets offer substantially more opportunities for our Investors.”

The company believes that legalization in the U.S. will continue to evolve on a state-by-state basis, creating a growing level of opportunity to offer its infrastructure and leasing options to growers. Michigan, Utah, and Oklahoma all have recreational cannabis on the ballot in 2018, and more states are likely to follow in the years ahead. CROP and its licensed tenant growers intend to create vertically integrated cannabis operations in every state where it is legal.

In a typical arrangement, CROP enters into a minority interest agreement to buy property and develop it, and the company then leases the land and infrastructure to the licensed tenant grower. The company receives 60 per cent of the earnings from the operation via management, leasing, and branding fees until the investment is repaid in full and maintains between a 30–49 per cent interest in the tenants’ earnings via the same fees after that. CROP also has a portfolio of 15 cannabis brands that it licenses to tenants. This gives the company the opportunity to build brand loyalty as the international cannabis market expands.

An Appetite for International Growth

In addition to its infrastructure leasing business, CROP is also the exclusive licensee of 55 cannabis products in Italy via a partnership with The Yield Growth Corp., as well as a non-exclusive white label deal with Yield in the U.S.

CROP’s Italy joint venture partner, XHemplar Italia, has planted 1,089,000 square feet of high CBD hemp in Northeastern Italy. CROP has a 30 per cent stake in the joint venture where the CBD will be processed and sold into international markets under the Xhemplar and Tiffany CBD brands, as well as 55 therapeutic/cosmetic brands licensed from the Yield Growth Corp.

CROP sees the opportunity to not only capitalize on the growing momentum of the cannabis market, but to leverage its brands into internationally recognized names as the market matures. With operations in California, Nevada, Washington, Italy, and Jamaica, CROP is well positioned for growth.

The U.S. market is expanding at a rapid rate and opportunities abound in Europe. Given the global trend towards legalization— and the management team’s history of executing — CROP is well positioned to seize the vast amount of opportunities this exciting new industry presents.

This story was provided by Market One Media Group for commercial purposes.

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